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Division Director

Christina Smith

Assistant Director

Rick Sweet


Accounting and Auditing
200 East Gaines Street
Tallahassee, FL 32399-0318

(850) 413-5510
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March 15, 1990

COMPTROLLER'S MEMORANDUM NO. 14 (1989-90)

SUBJECT: MONTHLY MILEAGE ALLOWANCES


Recent research into the requirements of the Internal Revenue Service indicates that monthly allowances for use of privately owned automobiles paid pursuant to Section 112.061 (7) (f), Florida Statutes, should be included on the recipient's Form W-2.

In order to capture such payments for reporting purposes, we have established a new object code, 265000 - Monthly Mileage Allowances. Effective immediately, all payments of amounts authorized by Section 112.061(7) (f), Florida Statutes, shall be coded accordingly. Additionally any payments made this calendar year need to be identified and reported to the Bureau of State Payrolls. This will permit us to manually adjust the earnings record for reporting on the employees' Form W-2.

The Internal Revenue Service recently issued temporary and final regulations which will substantially compound our problems on these payments effective July 1, 1990. Our preliminary reading of these regulations indicates that the State will be required to withhold income tax and social security tax on these payments. It is not our intent to include items which are not required to be reported. Because severe penalties may be imposed for willful failure to report and the state's past compliance has been questioned, it is our intent to demonstrate a good faith effort to bring the state into compliance.

If you have any questions regarding the use of this new object code, please call Kay Luger at 488-2922 or Suncom 278-2922. Questions regarding the reporting of such payments to the Internal Revenue Service should be directed to Patti Calhoun at 488-7762 or Suncom 278-7762.